index changes - All posts tagged index changes

Real estate investment trusts in MSCI and S&P Dow Jones indexes will soon move out of the “financial” sector and into a newly created, separate “REIT” classification.

Goldman Sachs’ David Kostin and his band of U.S. equity strategists estimate that forthcoming index changes will result in $19 billionin REIT-buying demand from active mutual fund managers. Read More »

GameStop is getting the boot from the venerable S&P 500 stock index in favor of a soon-to-be-beefed-up Global Payments (GPN), the index provider said on Tuesday.

GameStop will be relegated to the MidCap 400 index after the close of trading on Friday. The index change comes as GameStop’s stock languishes at a price well below where it traded in late 2007, when it was added to the big-cap U.S. stock benchmark. GameStop, spun off from Barnes & Noble in 2004, has a market capitalization of $3.3 billion, well below the $74 billion average for the index, according to Morningstar.

Like so many brick-and-mortar retailers, the company has struggled in an increasingly online world. Last month, GameStop estimated a lower quarterly and full-year profit below Wall Street estimates and said that same-store sales could fall 3%.

Global Payments, meanwhile, which processes data for credit and debit cards, is poised to complete an acquisition of Heartland Payment Systems (HPY) later this week. The new company’s combined market cap will be “more representative of the large-cap market space,” the index provider said.

A merger in the oil-and-gas industry means that shares of Foot Locker (FL) are coming off the bench to join the U.S. stock market’s most widely followed stock benchmark.

Foot Locker will replace Cameron International (CAM) in the S&P 500 after the close of trading on Friday, S&P Dow Jones Indices announced late on Monday. Cameron is being acquired by Schlumberger (SLB). Index changes tend to result in short-term stock gains for companies being acquired since index-tracking funds (and active funds that benchmark against the given index) must add shares.

S&P Dow Jones Indices announced after the closing bell on Thursday that Hologic (HOLX) and Centene (CNC) will join the S&P 500 after the close of trading on Tuesday, March 29. Hologic makes medical diagnostic and imaging equipment and surgical products. It will replace Pepco Holdings (PEP), which is being acquired by Excelon (EXC).

Centene provides services to underinsured or uninsured people and will replace London-based driller Ensco (ESV), which has been beaten up by falling oil prices. Shares of both companies to be added to the benchmark rose in after-hours trading.

Exchange-traded fund provider ProShares announced that it will change the index that undergirds its ProShares 30 Year TIPS/TSY Spread ETF (RINF) to a benchmark created by Citigroup and away from one furnished by Credit Suisse.

The ETF, which has just $3.4 million in assets under management, will have its name changed to the ProShares Inflation Expectations ETF after the switch, on or around April 15. The new index will be the Citi 30-Year TIPS (Treasury Rate-Hedged) Index. It takes “long” positions in Treasury Inflation-Protected Securities (TIPS) and “short” positions in plain, old Treasures to capture the breakeven rate of inflation, or the market’s expectations for inflation over the next 30 years.

Guggenheim Investments will swap indexes for two of its niche exchange-traded funds, according to documents filed with regulators.

Both the $163 million Guggenheim Timber ETF (CUT) and the$242 million Guggenheim Spin-Off ETF (CSD) will ditch indexes from Beacon Indexes for similar ones created by MSCI (MSCI) and Dow Jones S&P Indices, according to twoseparate filings with regulators.

The changes are stated to occur on or around May 20.

A change-up of holdings is kind of like a manager change for an active mutual fund. The filings warn that these ETFs “may experience additional portfolio turnover, which may cause the Fund to incur additional transaction costs and may result in higher taxes” when held in a taxable account.

The timber-stock ETF will subsequently be called the Guggenheim MSCI Global Timber ETF; the other ETF’s name will change to the Guggenheim S&P Spin-Off ETF.

A chain-reaction of price moves will send shares American Water Works (AWK) into the S&P 500 in a rebalance this week for the big-cap stock benchmark. Twenty-six of 29 utility-sector stocks currently in the index are electricity companies and the others are gas distributors, according to FactSet. American Water Works will be the only water utility.

S&P Dow Jones Indices announced late on Tuesday that Voorhees, N.J.-based American Water Works, which boasts a market capitalization of $11.5 billion, will replace troubled coal producer CONSOL Energy (CNX). The Pennsylvania coal company’s shares have declined more than 70% over the past year, reducing the company’s market value to around $2 billion. The change will take effect at the close of trading on Thursday, the index company said.

Utilities, along with telecommunications and basic materials companies, take up the least amount of real estate in the market-cap-weighted S&P 500. American Water Works’ stock jumped 4.5% in after-hours trading. Index additions translate into forced buying from index-tracking ETFs such as the Utilities Select SPDR (XLU) and the Guggenheim S&P 500 Equal Weight Utilities ETF (RYU).

Like it or not, the S&P 500 is adding to its roster of upstream energy companies.

Concho Resources (CXO) got the nod Tuesday to join the big-cap stock benchmark, S&P Dow Jones Indices said in a news release. Midland, Texas-based Concho prospects for and then develops oil and natural gas properties and will replace Plum Creek Timber (PCL), which is being acquired by Weyerhaeuser (WY).

Concho’s stock will be added to the S&P 500 after the close of trading on Friday. Concho’s shares popped 4.4% in after-hours trading. Companies tapped for index inclusion tend to get a lift as investors anticipate forced buying by S&P 500-tracking funds like the SPDR S&P 500 (SPY).

Energy companies in the S&P 500 are, by far, the worst performers over the past 12 months, down 30%; however, energy stocks are besting the S&P 500′s 7.3% decline by a full percentage point so far in 2016.

Four big government bond exchange-traded traded funds operated by BlackRock (BLK) will transition to new underlying indexes in the second quarter of this year.

The biggest ETF provider announced early on Friday that it will adopt indexes calculated by Interactive Data and drop similar Barclays indexes for its series of duration-specific U.S. Treasury bond ETFs, which collectively hold about $36 billion in assets. Read More »

Make room for Extra Space Storage (EXR) because this REIT is poised to join the S&P 500.

The Salt Lake City, Utah-based real estate investment trust will be the first new entrant to the big-cap stock benchmark in 2016, replacing Chubb (CB) after its acquisition by ACE (ACE), according to S&P Dow Jones Indices. Extra Space owns and operates — you guessed it — self-storage properties.

The index re-balance is scheduled to take effect at the close of trading on Friday. Shares of Extra Space Storage rose 2% in thin after-hours trading.

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